What Are PM Trudeau’s Plans For Canadian Economy Amid Looming Second COVID Wave?

Summary

• Trudeau’s Throne Speech on Wednesday focused on plans for reviving the Canadian economy and providing support to the public as the pandemic rages on.
• While the CEWS program is here to stay till next summer, CERB will most likely not see an extension.
• Political analysts have criticized Trudeau for not providing specifics of his plans.

Last month, Prime Minister Justin Trudeau had suspended the Parliament with the promise of returning with an ambitious legislative plan to battle the pandemic and revive Canada’s economy. On Wednesday, September 23, he finally laid out his plans for all to see. The Speech from the Throne, as it is called, marked the beginning of a new Parliament session and focused on rejigging COVID-related agendas, employment, women, environment and financial support programs.

Canada, at the moment, is in the midst of an economic recession and grappling with the second wave of the coronavirus. People are preparing for another sweeping lockdown, which saw businesses and markets collapse back in spring. While the economy is still reeling under the impact of the first COVID-19 wave, Trudeau’s speech was much-awaited. Now that it is out, his opposition members and many political analysts have criticized him for not providing specifics of his plans, while others feel it to be “promising” and benefitting for businesses and women.

Here are a few pointers for Trudeau’s Speech from the Throne:

1. Reviving Businesses Amid Covid-19 Pandemic

Trudeau-led Canadian government has been advising a phased-out opening of the economy. To accommodate that, the federal government will provide additional financial support directly to businesses that have been forced to shut down amid the pandemic.

Trudeau also revisited the government’s usage of its “fiscal firepower” on initiatives like the Canada Emergency Response Benefit (CERB) and the Canada Emergency Wage Subsidy (CEWS), which were meant to support businesses when the pandemic first hit. The CEWS program will now be extended till summer next year and take further steps to help “vulnerable businesses”.

These new steps include:

Trudeau also stressed on the previously announced federal funds of C$ 19 billion via Safe Restart Agreement, which helped provinces safely reopen their economies.

2. Creating Jobs To Fight Unemployment

The coronavirus outbreak has left Canada grappling with massive unemployment.

In his speech, Trudeau revisited the proposals of unemployment insurance system, making the qualifying process easier and including self-employed and contract-based employees.

In addition to that, Trudeau proposed plans to launch a program to create over one million jobs. He also stressed on restoring employment in the country to its pre-pandemic levels, which would be achieved by directly investing in the social sector and infrastructure, quick training modules and providing incentives to employers for hiring and retaining employees.

Apart from extending the CEWS program, the government also plans to indulge with businesses and the labor force to make sure that it meets their needs regarding health and economic issues.

The Youth Employment and Skills Strategy will be ramped up to create more paid work experiences for young Canadians, Trudeau added.

His speech, however, did not mention an extension of the CERB program, which paid unemployed workers about C$ 2,000 every four weeks. Instead, Trudeau said that the CERB recipients should avail the Employment Insurance (EI) support. As for those who do not qualify for the EI, the government will create something called the transitional Canada Recovery Benefit.

3. Supporting Women

Known to bank on his women voters, Trudeau did not leave them out of his Throne Speech.

To help Canadian women, who have been hit hardest by the ‘she-cession’, Trudeau proposed plans to create an Action Plan for Women in the Economy.

Trudeau’s plan includes making a substantial and sustained long-term investment that would create an early learning and childcare system across Canada. This plan, Trudeau said, aims at ensuring that parents, especially mothers, are not forced to “put their careers on hold” to raise children. The plan will be brought to action based on the model that exists in Quebec and will be built on previous investments.

In addition to that, Trudeau also plans to accelerate the Women’s Entrepreneurship Strategy, a program supporting women to build their own businesses.

4. What About Long-Term Financial Support For Public?

Stressing the central bank’s initiative to maintain low interest rates, Trudeau said that his government plans to “preserve Canada’s fiscal advantage” while supporting the public financially through this crisis.

He said the government will focus on investing directly to help strengthen the middle class overcome this crisis and come up with more ways to “tax extreme wealth inequality”. He proposed putting an end to limit the “stock option deduction” for rich people and established corporations, and looking into the issue of corporate tax avoidance.

Trudeau also announced plans to release an updated COVID-19 Economic Response Plan. This will elaborate on the government’s economic and fiscal position and map out the steps to put the plans mention in the Throne Speech into action.

What Do These Plans Mean?

Trudeau’s Throne Speech has provided an outline of his new plans but the details of the same haven’t been made public. Also, many political experts have pointed that Trudeau has not specified how these initiatives will be paid for, which won’t be clear until the budget update by Finance Minister Chrystia Freeland in fall.